Sales rise as first-time buyers try to buy before 31 March when stamp duty on properties worth less than £250,000 restarts
The housing market has got off to a good start to the year, as first-time buyers rush to beat the end of a holiday on stamp duty. House sales edged higher last month and, while prices in much of the country continued to drop, surveyors have become less pessimistic about the outlook for the next 12 months.
From 24 March, first-time buyers will no longer be exempt from stamp duty on properties worth less than £250,000. Some surveyors said this boosted sales at the lower end of the market.
About 12% more surveyors from all parts of the country reported rises rather than falls in new sales since the beginning of the year, according to the Royal Institution of Chartered Surveyors. They have become more optimistic, at least about the coming three months: 19% of surveyors expect sales to pick up. This is the strongest reading since May 2010.
Michael Newey of the RISC said: "With first-time buyers no longer exempt from stamp duty as of the end of March, it seems that some are looking to purchase homes before the deadline and, as a result, surveyors are relatively optimistic for the coming months. However, many problems with the market still exist and the lack of affordable mortgage finance is still preventing many from getting on to the property ladder. Prices are still falling across most parts of the country, but expectations for future prices have become less pessimistic."
Prices continued to fall in January, albeit moderately, with 16% more surveyors reporting price falls than rises. London and the north were the only two regions where more surveyors reported price rises than falls, while the West Midlands and Wales saw the biggest price drops, with readings of -54 and -41 respectively. Surveyors have become markedly less pessimistic about the price outlook a year from now, possibly factoring in a less severe economic outlook than only a few months ago, the institution said. The expectations balance improved from -19% to -4%.
Supply remained steady during January, with 7% more surveyors reporting increases rather than declines in properties coming on to the market. While slightly down on December's figure of 11%, this marks the fourth consecutive month that new instructions nationally have increased.
At the same time, overall new buyer demand dipped slightly in the first month of the year, with 7% more surveyors reporting falls rather than rises in new buyer enquiries. Despite an upturn in interest from some first-time buyers, surveyors report that lack of affordable mortgage finance continues to hold back the market.